Montgomery County Executive Isiah Leggett today announced his recommended Fiscal Year (FY) 2014 Capital Budget and proposed amendments to the FY 13-18 Capital Improvements Program (CIP). This CIP recognizes the vital need to control future debt and focuses on funding critical safety-related capital needs or projects that will boost the County’s recovering economy and spur job growth.

In order to fund these critical needs, the recommendations delay some planned projects. The six-year CIP (without the Washington Suburban Sanitary Commission) is $4.37 billion.

“Reducing CIP growth and debt service payments is an essential part of my ongoing strategy to ensure that our fiscal house is in order,” said Leggett. “We have made hard choices over the last six years. We have not yet finished making hard choices. That is why I am recommending limiting General Obligation (GO) bond issues to previously established bond guidelines of $295 million a year in each of the six years in this CIP to help bring our burgeoning debt service payments under control. Given the many other needs that must be met through our operating budget, I believe that it would be unwise to increase our long-term debt service costs beyond my recommended levels. Once incurred, debt service costs are expenses that take precedence over all other County expenditures, limiting our ability to fund other critical services.

“The actions of the General Assembly that shifted teacher pension costs to the County imposed stricter Maintenance of Effort requirements that constrain our flexibility in funding many important priorities. That is why our continued partnership with the County Council to maintain an affordable level of long-term debt is so crucial. Our cooperation and unity last year was essential to preserving the County’s AAA bond rating. I strongly urge the Council to again maintain my recommended borrowing limits.”

Leggett’s CIP amendments will generally provide for critical safety-related projects such as elementary school security systems, unforeseen bridge repair projects, storm drain culvert replacements and the replacement of some unreliable Ride On buses. Additionally, the CIP amendments provide funding for projects that are intended to boost the County’s recovering economy and spur job growth. In particular, Leggett is recommending continuing to implement Phase I of the Transit Task Force’s recommendation.

In his message to the County Council, Leggett stated that he is recommending some project deferrals and reductions. The reductions are shared across Montgomery County Government, Montgomery County Public Schools and Montgomery College. Even with these reductions, the budget sustains the quality of our local public education system, funding Montgomery County Public Schools construction and infrastructure projects at $1.34 billion and funding recently expanded Montgomery College initiatives with $356 million over the six-year period. Leggett stated that as he prepares the operating budget, additional changes in tax-supported current revenue funded projects may also be necessary.

Under a 1996 County Charter amendment, a new CIP is developed in even-numbered calendar years. In alternate years, like 2013, the Executive may recommend amendments to the existing six-year CIP.

• Ride On Bus Fleet: Replace remaining Champion buses, which have had fire safety problems, using increased short-term financing in FY13 and FY14. All the Champion buses were taken out of service in July 2012.

• Silver Spring Transit Center: $7.5 million GO bond supplemental to cover site improvement, utilities and construction costs required to prevent further opening delays. The County intends to seek reimbursement for project delay costs to the maximum extent allowed under the law.

• DPL Network and Telephone Infrastructure: $462,000 in short-term financing to upgrade all Montgomery County Public Library branch network switches and uninterruptible power supply units and to convert the phone systems at the Bethesda, Davis, Potomac, Long Branch, and Wheaton Public Libraries to newer gateway technology.

Projects that Enhance Job Growth or Leverage Private Funding

• Rapid Transit System: An additional $7.6 million in GO bond funding for concept planning for Maryland State Route 355, U.S. Route 29 and Randolph Road, the critical next step in developing the County’s future generation transit operations.

• Cost Sharing: A $5 million increase ($1 million a year) in GO funding to leverage private funding for arts facility grants. The Arts and Culture industry, through its organizations, generates $151 million in annual economic activity in the County, supports nearly 3,000 full-time jobs, generates $10.2 million in state and local government revenue and generates $74 million in revenue for restaurants, hotels and other businesses.

Project Delays and Reductions

• Six-year GO bond funding for Montgomery County projects has been reduced by $20.32 million through a six-month delay of the Bethesda Metro Station South and Capital Crescent Trail projects. Due to the current lack of state construction funding for these projects, this reduction is not likely to cause a delay in the project.

• The Colesville Depot, North Potomac Community Center, 2nd District Police Station, Good Hope Neighborhood Recreation Center, Platt Ridge and Metropolitan Branch Trail projects were delayed in the early years of the CIP.

• Unspecified reductions of approximately two percent in the FY15-18 Montgomery County Public Schools ($20 million) and Montgomery College ($5.2 million) budgets have been assumed in the recommended capital budget.